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Goal Setting Theory Overview

Since it was first researched five decades ago, Goal-Setting theory has been the most researched, utilized, and established theory of work motivation in the field of Industrial and Organizational Psychology (Redmond, 2010). The theory began with the early work on levels of aspiration developed by Kurt Lewin and has since been primarily developed by Dr. Edwin Locke, who began goal setting research in the 1960s. The research revealed an inductive relationship between goal setting and improved production performance. A goal is the aim of an action or task that a person consciously desires to achieve or obtain (Locke & Latham 2002; Locke & Latham, 2006). Goal setting involves the conscious process of establishing levels of performance in order to obtain desired outcomes. If individuals or teams find that their current performance is not achieving desired goals, they are motivated to increase effort or change their strategy (Locke & Latham, 2006). Locke and Latham stated that "The goal setting theory was based on the premise that much human action is purposeful, in that it is directed by conscious goals" (O'Neil & Drillings, 1994, p.14). The decision to set a goal results from dissatisfaction with current performance levels. Setting a goal provides structure to direct actions and behaviors to improve the unsatisfactory performance. Locke and Latham (2002) found a direct linear relationship between goal difficulty, level of performance, and effort involved. The direct linear relationship will stay positive, as long as the person is committed to the goal, has the requisite ability to attain it, and doesn't have conflicting goals (Locke & Latham, 2006). Locke and Latham's goal setting theory states that several conditions are particularly important in successful goal achievement.These include goal acceptance and commitment, goal specificity, goal difficulty, and feedback (O'Neil & Drillings, 1994). These conditions have been extended and edited by other researchers, such as Kenneth Blanchard and Spencer Johnson's SMART goals, which are conditions that need to be met to make goals effective.

Goal Setting Theory Mechanisms

Goal mechanisms affect performance by increasing motivation to reach set goals (Latham, 2004). These mechanisms are those inputs that affect behavior in groups or individuals, which serve to increase their attention to a goal, energy in pursuing a goal, persistence in achieving a goal, and ability to strategize to reach a goal. When an individual or team can focus their attention on behaviors that will accomplish the goal, they also divert attention away from behaviors that will not achieve the goal. Goals energize people to expend more effort based upon the effort expected to reach that goal (Redmond, 2010). Goals also lead to persistent pursuit of reaching the goal by providing a purpose for that pursuit (Latham, 2004). Lastly, when a person is pursuing a goal, they will strategize the best way to meet their goals. Mechanism Direct Attention Energizing Description Goals direct attention to behaviors that will accomplish the goal and away from the behaviors that will not achieve the goal. Inspiration to put out a certain amount of effort. Example In trying to become a proficient airline pilot, one would expect to train long hours in the flight simulator to achieve proficiency. An individual who wants to become an airline pilot will train to prepare themselves on a high

level to accomplish this goal. Task Persistence Effective Strategies How much time that is spent on the behavior to achieve a goal. The individual that wants to become an airline pilot will study hard and train longer hours.

In wanting to achieve a goal the individual seeks In trying to become an airline pilot a person out a way to achieve it. might look for ways or techniques to maximize their training.

Goal Setting Theory Conditions

There are necessary conditions that must be met to make goals effective in invoking motivation through the above mechanisms: (1) goal acceptance/goal commitment (2) goal specificity (3) goal difficulty, and (4) feedback on progress toward the goal.

1. Goal Acceptance/Goal Commitment

Before a goal can be motivating to an individual, one must accept the goal. Accepting a goal is the first step in creating motivation (Locke & Latham, 2002). Goal commitment is the degree of determination one uses to achieve an accepted goal. Two primary factors that help to enhance goal commitment are importance and self-efficacy. Self-efficacy is the belief that one can attain their goal. Importance refers to the factors which make goal attainment important to people, including the importance of the outcomes that they expect as a result of working to attain a goal (Locke & Latham, 2006). These factors can be as simple as making a public announcement about the commitment, or as complicated as a formal program of inspirational mentoring and leadership. Importance and self-efficacy also require acknowledgment of the benefits of personalizing the goal. The individual must find the goal important and must believe they can achieve it (Locke & Latham, 2006). Making the importance of the goal personal provides the individual with the motivation to move beyond failure and maintain the path toward the goal. Research by Erez, Earley, and Hulin (1985) indicates that participation in setting ones own goals result in a higher rate of acceptance. Locke and Latham determined that when goal difficulty is held constant, performance between participatively-set and assigned goals do not differ significantly as long as the goal is accepted (Locke & Latham, 2002). Their explanation for the discrepancy lies in the way the goal was presented. If the objectives were clearly explained to the participants, motivation increased. Alternatively, if goals were briefly administered with little explanation, motivation was lower. In other words, the goals need to be specific, which leads us to our next condition. Klein, Wesson, Hollenbeck, Wright, and DeShon (2001), developed a five-item scale for assessing goal commitment. Responses are provided on a five-point Likert scale using "strongly disagree" to "strongly agree" end-points. Goal Commitment Scale 1 Its hard to take this goal seriously 2 Quite frankly, I dont care if I achieve this goal of not. 3 I am strongly committed to pursuing this goal. 4 It wouldnt take much to make me abandon this goal. 5 I think this is a good goal to shoot for.

*Note: Items followed by indicate that the item should be reverse-scored before analysis. Developed by Klein, Wesson, Hollenbeck, Wright, and DeShon (2001)

2. Goal Specificity
A goal must be specific and measurable. It should answer the who, what, when, where, why, and how of the expectations of the goal. Specificity and measurability provide an external referent (such as time, space, increment, etc.) to gauge progress, whereas vague do better goals are ambiguous and often have little effect on motivation. Removing ambiguity allows one to focus on precise actions and behaviors related to goal achievement. The more specific the goal, the more explicitly performance will be affected. Specific goals lead to higher task performance by employees than do vague or abstract goals (Locke & Latham, 2006). A person can set a general goal to sell more cars per month; however, setting a goal to sell two cars per day for the next thirty days is more specific and therefore more effective. Goals without an external referent allow for a wide range of acceptable performance levels (Locke & Latham, 2002, p. 706). In order for performance to increase, goals must be challenging, specific, and concrete.

Goals should be: Conceivable ---> One should conceptualize the goal so that it is understandable clearly. Believable---> One should believe that the goal can be reached and that other people believe in it. Achievable---> One should ask themselves if given their strengths and weaknesses can they reach their desired goal (Locke, E.A, 2002)

3. Goal Difficulty
The difficulty of a goal affects the motivation and commitment of the individual, impacting performance. The basic idea is that the more challenging the goal, the more committed and motivated the person must be, and thus the better the resultant performance (Redmond, 2010). The highest level of effort occurs when the task is moderately difficult and the lowest level occurs when the task is either very easy or very hard (Locke & Latham, 2002, p. 705). An easy goal will be perceived as an unnecessary; therefore, enthusiasm will dwindle. Furthermore, goals that are too difficult come with obstacles that often discourage motivation. For an individual it is both the perception and the reality of the greater needs associated with a challenging goal that leads to the motivation and commitment to exert more effort. A goal that is challenging, but attainable, can increase a person's motivation for the task, but when given a task with the appropriate difficulty level and specificity, how the task is established (participative or

assigned) is not a differentiating factor. Gergen and Vanourek (2009) suggest setting "BHAGs- "big, hairy, audacious goals" - that really stretch us" (p. B03). Finding the correct balance between ambitious but achievable is crucial in setting a goal. The figure below illustrates how difficulty level affects motivation and performance:

Goals that are too easy or too difficult negatively affect motivation and performance. The greatest motivation and performance is achieved with moderately difficult goals (somewhere between too easy and too difficult).

4. Feedback
Feedback is necessary in order for goals to remain effective and retain commitment. Without feedback people are unaware of their progression or regression and it becomes difficult to gauge the level of effort required to pursue the goal effectively (Sorrentino, 2006). Additionally, feedback allows for individuals and teams to spot any weaknesses in their current goals, which in turn allows modifications to be made (Smith & Hitt, 2005). It is necessary for goals, and the people making the goals, to be flexible with them (Bennett, 2009). Feedback will be most effective when it is directed at setting more challenging goals (Locke & Lantham, 1979, p. 75). Typically, people will increase effort and productivity when current levels of performance may not achieve the goal. For instance, if one is half way through the time period, yet less than half way to achieving the goal, one may increase performance to achieve the goal. However, without feedback, one has no referent to guide performance or achievement (Locke & Latham, 2002, p. 708). Feedback can either be process oriented or outcome oriented. Process feedback focuses on tasks that are in process and can affect task strategy, performance, and goal outcomes. Managements can provide this feedback by evaluating the individual's processes taken toward the goal and provide any feedback on changes that can be made to help the individual reach their goals more effectively. Outcome feedback is focused on the outcome of the goal. However, outcome feedback is less productive because it will not aid in the attainment of the goal. (Redmond, 2011) In receiving feedback, an employee or individual will know that their work is important and that their contributions are being recognized.

S.M.A.R.T. Goals
The above goal conditions for positively affecting motivation and performance have commonly been referred to as SMART goals. Kenneth Blanchard and Spencer Johnson first developed the SMART goal system when branching the concept of goal theory beyond academia into the area of management and leadership (Blanchard, Zigarmi, & Zigarmi, 1985). The meanings for the of Blanchard and Spencer's SMART goals have evolved over time and the modern definitions are represented in the figure below:

The term raising the bar is a common metaphor for setting challenging goals. Therefore, to further explain the elements of SMART goals, an analogy of a track and field high jumper will be used to demonstrate how raising (or lowering) the bar affects motivation and performance. In addition, examples of SMART goals will also be generalized in a management situation to demonstrate the various goal essentials and conditions. In order for goals to translate into motivation and improved performance, goals must be specific. A goal to just jump higher is too general. Instead, an example of a specific goal would be to improve high jump by three inches. A management goal to improve profits is too general. This broad goal could include increasing sales, reducing costs, or a combination thereof. A more specific goal would be to increase sales by 8%. Goals must be measurable to be able to provide progress feedback and to know when the goal is achieved. Three inches (and increments below, between, and above) are both measurable and specific in order for the high jumper to be able to gauge his progress and achievement. Therefore, instead of the goal being improve high jump by three inches, the jumpers goal could be to increase high jump from 64 inches to 67 inches. Similarly, the manager can measure the progress of the sales figures to understand how much focus and resources to dedicate to achieving the goal. Therefore, a goal of increasing sales from $80,000 to $86,400 is more specific and measurable than the ambiguous goal to just increase sales. A goal must be assignable to an individual or a group. Because high jumping is an individual goal, the high jumper would assign this goal to himself or perhaps the high jumpers coach might assign this goal to the jumper. In the sales example, the manager must be able to assign the goal to a specific person or department. The goal must be challenging, yet realistic. Lowering the bar for a high jumper could not realistically increase motivation nor enhance performance. Similarly, setting a goal to raise the bar ten feet is not a realistic or attainable goal and would therefore not positively affect motivation or performance. Similarly, increase sales by 300% may not be a realistic and attainable goal. By setting goals unrealistically high, the manager may not see increased motivation or performance in the sales team. In order for goals to positively affect motivation and performance, goals must be time-related. For the high jumper, he may set a time within three months which may provide a realistic time frame to meet his goal. However, a time line of tomorrow may make achieving the goal unrealistic. Similarly, before Im forty may be a time line that is so far into the future and lacks urgency and motivation. A realistic time line for our manager might be by the end of next quarter. Increasing sales by 8% by the end of the week may be too aggressive, and before the company goes bankrupt is too vague of a time line.

S M

A R

When originally introduced by Blanchard, SMART goals were denoted as: Specific and Measurable, Motivating, Attainable, Relevant and Track-able (Blanchard, Zigarmi, & Zigarmi, 1985, p. 89-90). Over time, the SMART acronym for goals has evolved into what they are today: Specific, Measurable, Assignable, Realistic, and Time-Related. "Specific" and "Measurable" have been split into two separate categories. The requirement that goals be specific has been enduring in the SMART goal acronym. "Motivating" was dropped from the SMART system, perhaps because it is the overarching theme of goals. If done correctly, goals will be a positive motivator and will enhance performance. The term "attainable" has had alternatives--such as "achievable." However, as stated above, a goal must be accepted and have commitment in order to be achieved. As a result, the A in SMART goals has become "assignable". "Relevant" has widely replaced "Realistic," possibly because irrelevant goals would not be realistic and, while a goal may be relevant, whether a goal is realistic may depend on the time frame for achieving the goal. Track-able is redundant

to measurable and has been replaced with time-related because goals with no deadline lack direction and urgency. SMART goals also may be evolving into SMARTER goals with the E adopting meanings like emotional, exciting, enthusiastic, and evaluate and R adopting terms such as reevaluate, reassess, and reviewed often.

Research on Goal Setting Theory

Goal setting is a general theory that can be applied in a multitude of work situations. Support for the theory comes from individual and group settings, laboratory and field studies, across different cultures and involves many different tasks (Locke & Latham, 2002). The strongest support relates to the relationship between specific, difficult goals and task performance. A meta-analysis performed by Tubbs (1986) supported the concept that specific, difficult goals are positively correlated to improved performance. Other research obtained similar conclusions and further stated that, If there is ever to be a viable candidate from the organizational sciences for elevation to the lofty status of a scientific law of nature, then the relationships between goal difficulty, specificity/difficulty, and task performance are most worthy of serious consideration (Mento, Steel, & Karren, 1987, p. 74). DeWalt, et al. (2009) found a direct correlation between those who achieve set goals and the motivation to create additional goals or add more challenging aspects to the current goal based on feedback. Parker, Jimmieson, & Amiot (2009) found that autonomy in the workplace improves self-efficacy, which improves performance towards reaching goals. Within this idea is the vision and structure that goal setting provides, which helps to motivate individuals and teams to perform better and do more (Sorrentino, 2006). Goal setting is not without its critics. Ordez, Schweitzer, Galinsky, and Bazerman (2009) stated that the theory is over-prescribed and can potentially cause harm to an organization. Care should be taken in applying goal setting due to the possible unintended side effects. The arguments levied against the theory are not new and have been discussed by previous researchers. For example, Ordez, et al. (2009) argued that unethical behavior can result from motivating employees to meet specific and challenging goals. In an effort to reach a sales quota, salespeople may either fudge numbers or lie to customers in order to reach their monetary goal. According to the authors, this focus on goal attainment can actually promote unethical behavior by creating a focus on ends rather than the means (Ordez, et al., 2009, p. 12). Not only was negative behavior addressed by Latham & Locke, but the means to mitigate this issue were offered as well, such as offering progressive awards toward goal attainment, organizational control systems, and an ethical workplace culture (O'Neil & Drillings, 1994). The preponderance of empirical research supporting goal-setting theory illustrates its utility as a method to motivate individuals and improve organizational outcomes. While some caution may be in order, Locke and Latham (2002) argue that failures resulting from the theory are usually due to errors in its application and can often be prevented. The subject of human motivation is vast and complex. No single theory fully explains every aspect of what motivates individuals to perform better.

Strengths, Benefits, Limitations and Weaknesses of Goal Setting Theory

Strengths and Benefits
Goal-setting theory is one of the most popular theories in use among I/O Psychologists due to support provided by extensive empirical research and its relative simplicity as compared to other theories

(Locke & Latham, 2002; Redmond, 2010). Smith and Hitt (2005) in their book, Great Minds in Management, reinforced the popularity of this theory with their reference to a 2003 assessment of OB scholars who rated goal-setting theory, first in importance out of seventy-three management theories, validating Redmond's (2010) claim that goal setting has had tremendous research and practitioner support. Using techniques such as correlational, experimental and quasi-experimental design, research studies conducted in eight countries, over time periods varying from one minute to 25 years, and using approximately 40,000 participants. This yielded data to support increased performance on over 100 different tasks, applicable to individuals as well as groups, organizational units, and entire organizations (Redmond, 2010). Goal setting has been found to inspire individuals and is one of the keys to self-management (Latham, 2004) In many cases, it creates an alternative purpose for work and provides the challenge that enables individuals to overcome even the most physically exhausting tasks (Latham, 2004). Regardless of whether a goal requires cognitive or physical exertion, studies have shown that the greatest amount of effort is applied to those that are considered more challenging (Latham, 2004). From a psychological standpoint, a sense of pride develops from an individual's sense of improved self interest; which may lead to better jobs and increased pay over time (Latham, 2004). By making the commitment to set a goal and focus on its accomplishment within a specified period of time, attention is often diverted away from activities that are considered goal-irrelevant. For this reason, people are often motivated to utilize or discover the knowledge necessary for successful completion (Latham, 2004).

Limitations and Weaknesses

When two separate goals are set at the same time, exerting too much focus on one may make it difficult to achieve the other (Latham, 2004). For example, if someone sets quantity and quality goals simultaneously; trying too hard for quantity may cause quality to be neglected (Latham, 2004). However, this can be fixed by prioritizing separate goals or finding a balance between goals directly dealing with each other. It is more important to have well thought out goals than to have too many and not be able to follow through on any one goal (Gergen & Vanourek, 2009). Another limitation deals with goals and risks. During a computer game study, Knight, Durham, and Locke (2001) found that participants who were given difficult performance goals increased risk strategies to improve performance. Additionally, a limitation that can occur is commonly referred to as tunnel vision. This is when employees focus so intently on their goals that they will ignore other aspects of their job (Redmond, 2010). Improper management techniques, or the presence of inequity in the workplace (e.g., underpayment), can subvert the effectiveness of the goal setting theory. Also, not accounting for an individuals subconscious actions also provides weaknesses to the goal setting theory (Lock e & Latham, 1979, p. 80). This approach also does not account for actions motivated by the subconscious; as the goal-setting theory focuses on cognition with no regard to the subconscious (Redmond, 2010). On occasion, an individual can do something without being aware of what is motivating them. Finally, goal-setting theory focuses on how goals are related to job performance, but does not take into account the "why", and does not account for why setting goals is linked to performance (Redmond, 2010). Practical Solutions (Locke, E.A. 2002) Simplifiy Goals List all the resources Assign a manager to manage the goals of the employees Breakdown the goal into bite-sizes (making it easier to attain) Discuss any red flags or possible conflicts Agree to a timeline for the goal

Follow-Up

 Coach

Meet weekly with the team members Schedule time to review goals Follow up informally on goals in conversations or e-mail Use e-mails as reminders Delegate follow ups to other associates who are strong in the coaching area Support 360 degree coaching Provide challenges by using 3 elements of effective coaching, i.e.;observing, modeling behavior and follow up.

Application of Goal Setting Theory in the Workplace

Goal setting is widely used in the workplace as a means to improve and sustain work performance. Goal setting theory is based on the assumption that behavior reflects an employees conscious goals and intentions. Consequently, the expectation is that employee efforts and performance within an organization will be influenced by the goals assigned to or selected by these employees. In the workplace, successful managers use the goal setting theory to clarify expectations, improve performance, and develop employees into stronger workers, which in turn makes the company stronger (Fried & Slowik, 2004). Some of the ways managers use this theory are: Include employees in goal setting Set individual goals that flow directly from those of the work unit Set specific goals Ask supervisors to set their own goals Have meetings with employees regularly regarding performance and progress on developmental objectives Provide ongoing feedback and coaching Have employees take the lead in both setting goals and the review process Ensure that goals are focused on areas that are important to current and future goals Align reward systems with desirable results Monetary Job and career related Recognition and pride related Social enhancements Status elevation Time off

Some reward systems that are used for employees reaching their goals are:

A popular application of the goal setting theory in the workplace is management by organization (MBO). (Redmond, 2010) The process arrived independently from the goal setting theory but joined forces with the theory in the late 1900s through management practice. (Miner, 2007) MBO focuses on a joint determination by subordinate and superior goals, major areas of responsibility, and result expectations. These are the measures used to determine employee contribution and operations of the organization. While there are notable key steps in MBO, the theory varies between organizations and from theorist to theorist. Some of these differences include: setting objectives, working towards goals, and reviewing performance. MBO is not an individual effort; rather it is an essential collaboration of employees and managers to actively participate in the goal-setting process and the how to of reaching

their goals. MBO consists of three stages: setting specific and measurable goals, managers monitoring the success toward reaching the goals and offering feedback, and reviewing and evaluating the results. Like any other method, MBO has its positive and negative aspects. Diversity in decision-making is positive because it allows for decisions that are specific and fit the organization. A negative aspect of MBO is that the motivating effects of difficult goals are susceptible to dissipation over time, even when individuals are most responsive to them. (Miner, 2007) However, even with the negatives, after a review of many studies on MBO, Locke and Latham (1990a) conclude, the overall MBO success rate hovers around the 90% success rate obtained for micro-and group-level studies".

Examples of Goal Setting in the Workplace

General Electric (GE) successfully applies goal setting theory in all levels of the organization, not just on the departmental and individual level. GE successfully implements goal setting theory on an organizational level by making the idea behind goal setting part of their vision/mission statement: Help us set goals for ourselves and for our GE businesses (GE.com, 2009). Throughout their annual Citizenship Report, Our Actions (2005), it refers to the concept of goal setting. They summarize their goal setting initiatives as a recipe for success for all companies and capitalism. GE sets goals for all aspects of organizational life, reviews those goals regularly, putting systems in place to reach those goals, and continually seeking to improve processes and set challenging goals for all employees. For these reasons it is a wonderful example of the goal setting theory in the workplace. The Federal Express Company (FedEx) tried a form of goal setting that was called 360 degree goal setting. In this form of goal setting, supervisors are asked to write goals for their subordinates after they receive input from them. The goals are written for each employee after input from internal and external sources. The main objective of this type of goal setting is a more complete understanding of expectations of employees and customers. There is a pledge for 24-hour response to email and phone messages, a two-hour response to emergency calls, a bi-monthly meeting with the employees, and a semi-annual training session on topical subjects. After trying this method with the human resource department, FedEx found that the pros outweighed the cons. The only true con was that it took time to train the employees and managers on this new system. However, the pros that they established from it were greater accountability for the employees' performance, clear expectations for the employees, and precise measurement of and feedback on performance goals. After the trial run, FedEx then began implement this goal setting into other departments (Milliman, Zawacki, Chulz, Wiggins, & Norman, 1995).

Team Goals
Teamwork and collaborative assignments have begun to rise within organizational configuration. As a result, managers have changed how they understand and practice goal setting. Team goals function similarly to individual goals, but there are unique complications that make goal setting in a team environment more complex. For example, in order for individuals' efforts to be directed toward team performance the team goal must first be accepted by that individual. However, the individual dynamic within team environments can cause personal goals to compete with team goals. This competition has the ability to cause discord within the team and misdirect performance. In order to facilitate team goal setting and monitoring of team performance relative to team and organizational goals, managers have begun utilizing electronic dashboards. These applications enable real time performance tracking by the users and also ensure that team goals are aligned with the organizations forecast. Dashboards also aid in providing feedback to teams, enabling them to easily review their performance compared to the team goal (DeShon, Kozlowski, Schmidt, Milner, & Wiechmann, 2004